QOCS & DISCONTINUANCE: ANOTHER CASE (WHERE THE CLAIMANT WAS SUCCESSFUL)

I am grateful to barrister James Bentley for drawing my attention to the judgment of Mr Recorder Berkley in Magon -v- Royal & Sun Alliance Insurance PLC (26th February 2016). Another decision in relation to QOCS and discontinuance. The District Judge had set aside a notice of discontinuance and ordered the claimant to pay costs. The claimant appealed successfully.

KEY POINTS

The claimant had, accidentally, sued the incorrect insurer.

The defendant driver was subsequently joined into the action and the action settled against the driver.

The claimant then discontinued against the insurer.

The insurer applied (out of time) to disapply QOCS.(the application was amended to set aside the notice of discontinuance).

This application was initially allowed by the District Judge.

However the claimant’s appeal was allowed. QOCS continued to apply.

THE CASE

The claimant was injured by a driver who was insured by a foreign insurer. When proceedings were issued Royal & Sun Alliance were, wrongly, sued as a defendant. They were the handler. The claimant could not substitute the correct insurer so amended proceedings to proceed against the driver personally. The claim was then settled and on the 5th June 2015 then discontinued against Royal & Sun Alliance.

THE DEFENDANT’S APPLICATION IN RESPECT OF QOCS

On the 16th July 2015 the defendant made an application to disapply the QOCS regime.

The application was made by way of permission to enforce the costs order that followed upon discontinuance.

However at the beginning of the hearing the defendant applied to amend the application to one whereby the notice of discontinuance was set aside.

This application was allowed by the District Judge.

THE JUDGMENT ON APPEAL

The judgment on appeal contains an interesting discussion of the rival contentions in relation to the nature of QOCS. The Recorder allowed the appeal and the claimant retained the QOCS protection.

28. Looking at the deputy district judge’s judgment, it seems to me that the only matter that he considered was the question of whether this was a case which wasted court resources and whether this was the type of case which a defendant might or should be entitled to recover 13 their costs from a claimant by virtue of removing the QOCS protection. It is my judgment that the deputy district judge should have taken into account the origin and purpose of the QOCS regime which he did not. He should also have taken into account the fact that there were these exceptions and they are specifically referred to. It would have been easy for the Rules Committee to have disapplied QOCS where a claim was struck out or vulnerable to being struck out or something of that nature. They could merely have provided that the exception applied where a case disclosed no reasonable grounds for bringing the proceedings simpliciter, without reference to a requirement of being struck out. The fact that the matter had not been struck out is something that the district judge should have taken into account as well, and he did not make any reference to it at all. He did not take into account, as I have said, and the history of 38.4(2) and the fact that when you take the combination of 38.4 and 44.15 and 16, this was a big step to remove the QOCS protection for the claimant. In this case, the costs were described as nugatory by counsel for the defendant but that would not necessarily be the case in every scenario. In my judgment, when a district judge is considering whether to grant permission to set aside a notice of discontinuance, they should take into account the fact that there are exceptions specifically provided for in the CPR, together with the history of why there is jurisdiction to set aside notices of discontinuance as well as the effect that such a setting aside would have on the carefully considered and applied QOCS protection found elsewhere in the CPR. 2

9. When exercising his discretion, the district judge should also have taken into account prejudice suffered by the claimant as well as that by the defendant. He took into account the effect on the defendant but not the effect on the claimant, and he failed, therefore, to put that into the balance. When he considered the effect on the defendant, that was the only apparent consideration that he had. He did not give sufficient weight to any of the other factors which the claimant has pointed out in the notice of appeal subject to the matters I 14 will now make reference to.

30. The fact that the claim did settle: I accept the defendant’s argument that it was a separate claim. It is, however, of peripheral consideration that this was not a fundamentally flawed claim or a dishonest claimant trying to bring a dishonest claim. This was a genuine claim where a mistake had been made”